Achieving a Robust Market on
the Distribution Grid
by Mark B. Lively
Second Carnegie Mellon Conference
in Electric Power Systems:
Monitoring, Sensing, Software and Its Valuation
for the Changing Electric Power Industry
2006 January 11-12
Achieving a Robust Market on the
Distribution Grid
“People worked harder for a reward, especially
one that coincided with patriotism.” Tom Clancy,
Without Remorse.
“Producers work harder for a reward, especially
one that coincides with reliability.” Mark Lively,
in explaining WOLF.
Achieving a Robust Market on the
Distribution Grid
• Market Examples
• Market Theory
• Electric Applications
Market Examples
•
•
•
•
Cantina D’Italia
Leon Walras
Walrasian Auctions
Hurricanes Katrina & Rita
Basil Stuffed Veal Chops
12:00 AM
11:00 PM
Time Last Sold
10:00 PM
9:00 PM
8:00 PM
7:00 PM
6:00 PM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Date
15
16
17
18
19
20
21
22
23
24
25
26
27
Basil Stuffed Veal Chops
12:00 AM
11:00 PM
Time Last Sold
10:00 PM
9:00 PM
8:00 PM
7:00 PM
6:00 PM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Date
15
16
17
18
19
20
21
22
23
24
25
26
27
Basil Stuffed Veal Chops
12:00 AM
11:00 PM
Time Last Sold
10:00 PM
9:00 PM
8:00 PM
7:00 PM
6:00 PM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Date
15
16
17
18
19
20
21
22
23
24
25
26
27
Basil Stuffed Veal Chops
12:00 AM
11:00 PM
Time Last Sold
10:00 PM
9:00 PM
8:00 PM
7:00 PM
6:00 PM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Date
15
16
17
18
19
20
21
22
23
24
25
26
27
Basil Stuffed Veal Chops
Demand Curve
$40
$35
Dinner Charge
$30
$25
$20
$15
$10
$5
$0
0
10
20
30
40
Potential Sales
50
60
70
80
Market Examples
•
•
•
•
Cantina D’Italia
Leon Walras (1834-1910)
Walrasian Auctions
Hurricanes Katrina & Rita
Market Theory
• Supply and Demand
• Feedback Loops
• Quantifying the Quality of Public Goods
Wide Open Load Following
Dynamic Economic Theory
Supply
Demand
Price
($/MWH)
Equilibrium Price
Price Pressure
Nominal Price
Power
(MW)
Wide Open Load Following
Control Theory
target
+
Quantify
$
cost
When We Run Out
of Veal Chops
Wide Open Load Following
Control Theory
target
+
Quantify
$
cost
Frequency
Wide Open Load Following
Control Theory
target
+
Quantify
$
cost
Power Quality
Electric Applications
• Public Goods
–
–
–
–
–
Frequency/ACE
Line Loading
Voltage
Harmonics
Satisfied Diner
• Commodities
–
–
–
–
–
Energy
Location
Reactive power
Harmonics
Veal Chops
Achieving a Robust Market on
the Distribution Grid
by Mark B. Lively
Second Carnegie Mellon Conference
in Electric Power Systems:
Monitoring, Sensing, Software and Its Valuation
for the Changing Electric Power Industry
2006 January 11-12